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Monday, September 16, 2019

Agro Credit Case Study

Creating a Process-Driven Organization at AGCredit Answer 1:-AgCredit was a Midwest Agriculture Credit and Loan company. It was a midsize financial institution focusing on agribusiness. It had grown significantly in the past few years and was holding its own against other, much larger banks because of its extensive customer knowledge. Kate Longair to the CEO of the company explained all the processes and the systems the company used and how they were integrated using a diagrammatic view for the same. The CEO then decided upon the need for change into various departments to bring about a transformation in business.Finney, the CEO wanted to focus on AgCredit’s key strategic drivers which included continuous growth, expanded customer relationships, the ability to spend more time with the customer, the ability to cross-sell between business divisions and the ability to provide a consistent customer experience across all delivery channels. The CEO’s vision for growth was to create a customer-centric organization by using technology to support people and processes. Realizing that systems integration by itself would not produce the desired result, management redesigned the company’s business processes from beginning to end.Now the challenge was to redesign the IT organization to support the new organization structure. Answer 2:- IT organizations serve two purposes: development (i. e. , which involves the acquisition of new systems and technology and the implementation of these new systems into the workplace); and operations (i. e. , which involves running the data center, production programs and networking infrastructure is decentralized. It leads to facilitation of various business processes across the bank. IT was in a significant state of disarray.Absence of appropriate IT Governance as well as an architecture plan. IT was organized in silos to mirror AgCredit’s divisional structure and each business unit owned and governed its own IT Pr ojects. The company has outsourced chunks of IT functions. The tasks are unevenly and randomly divided amongst the staff irrespective of their expertise. The current structure seems to be more like the enterprise oriented architecture. Due to irregular IT organizational structure many problems arouse with the business processes which led to different choice for the architecture of IT.The structure moreover has a cross-silo flow which creates confusion amongst the business processes as well as data mess. The information appears in various formats, which is difficult to reconcile. Answer 3:- Key Issues: – IT was completely broken and lack of systems integration. Everyone was aware of adding value to processes to the company but how the business strategy would fit with everyone else’s to deliver enterprise value was unknown by others. There exists lack of knowledge of business processes and how they worked together.The key business processes had never been written down be fore and hence they needed to be documented. The front line staff had to access many systems for simple business processes. IT was in a significant state of disarray. A key problem was application centric approach the organization took to its work. Business people would demand new systems from IT for every process whereas IT staff would always train them to make use of the existing systems. This created data mess as there were various systems with loads of information scattered everywhere.Due to this the information appeared in different formats, which were difficult to reconcile. This was a significant challenge when creating accurate reports for banking and other government regulators. IT is negative in business: expense, inability to get work done in a timely fashion, bad information, customer complaints and poorly trained IT staff. AgCredit starts with no formal IT architecture. It is also about the work the business needs to do first in order to create the right environment for IT transformation, i. . , a process focus and a business value focus, not a systems focus. It stresses that optimizing the enterprise is the new source of business value and this means integrated processes across the company and integrated information. To achieve this, IT will need to transform its structure, governance, and approach to systems development. Answer 4:- Proposed IT Organizational Structure Decentralized organizational structures often have several individuals responsible for making business decisions and running the business.Decentralized organizations rely on a team environment at different levels in the business. Individuals at each level in the business may have some autonomy to make business decisions. The challenge for IT will be in the transformation because it will need to have a structure that supports where the organization is going, while still respecting the fact that it is not there yet. IT should be aligned with processes, not individual business functio ns and all new development should be undertaken with the process owners and with the approval of the Enterprise Integration Program.It indicates that all business-facing IT functions should be aligned with the major business processes that have been identified. Internally, therefore IT will need groups dedicated to each of the major systems that currently support the business. These groups will be responsible for all maintenance and any new development needed to keep the organization running smoothly while new service-oriented functionality and common data are put in place. These groups will be needed to make the necessary adjustments to existing systems as this new functionality is put in place.Pros- Redesigning a company towards a process-based organization implies that all activities, which logically belong together in order to create value for the customer, are grouped together. Customer’-processes are defined and taken as the basis for an organizational unit. ‘Deve lopment’- and ‘planning and control’- processes that are necessary for reaching the core objective of the unit are implied. This implies that the organizational structure of a business or a company is based on organizational units which are organized around the core processes.Structuring a business or a company process-wise implies that coordination across process units is kept at a minimum. The following paragraphs illustrate how companies or business units can be structured around processes. Answer 5:- Project Selection Process to ensure alignment with the enterprise business Vision- Effective collaboration between business and IT is essential to the success of both SOA and BPM. A Business Rule Engine can act both as a technology and collaboration enabler; the below points will explain how the organization can improve business processes and move toward SOA by focusing on these strategies. . Streamline business processes by separating business logic from flow lo gic 2. Create processes that are more agile by making it easy to update business logic 3. Align the business goal of more dynamic decision-making with SOA technology 4. Enable effective IT-Business collaboration by giving IT the control it needs and Business Users the tools they need to maintain business logic Some projects will be foundational in nature, i. e. , be prerequisites to other projects; others may be needed to upgrade the IT infrastructure.It will therefore be important that the IT Steering Committee consider a variety of dimensions of project value, in addition to ROI, in determining which projects they would like to undertake. Projects which are functional in nature would therefore not score as highly as those which contribute towards the overall company strategy. All business leaders should consider all IT projects and make a decision as to which ones to undertake according to their enterprise value. The CIO should also ensure that foundational work is considered and ranked appropriately to enable IT to carry out the business visionAnswer 6:- Manley â€Å"Make the case† for Service-oriented architecture (SOA) helps organizations more easily transform their business processes for high performance by simplifying the underlying information systems. Old architectural approaches that once expanded business opportunities now limit growth—but existing systems cannot be simply be replaced. Service-oriented architecture gives existing systems the flexibility and agility to respond to a business environment which is changing rapidly.Service-oriented architectures allow businesses and governments to capitalize on opportunity by:-Becoming more agile, driving cost reductions, Boosting ROI Manley has to prove that SOA will work and that IT can deliver on what it promises. He doesn’t necessarily have to deliver a project that will have an ROI, but he has to work with the EIP to identify a small sub-process that will demonstrate that SOA ca n deliver functionality in a new way that will be effective for the organization. If he can automate a small process and show how it integrates with various data and systems in a new way, the business will â€Å"get it†.Answer 7:- Internal IT Capabilities should include the following to create an IT department that helps build business architecture:- * A full-time staff of programmers, developers, and other IT professionals * The ability to rapidly develop and deploy large, complex data collection and direct marketing solutions in-house using internal resources * Professional consulting services in the areas of marketing, business process improvement, supply chain management, and process optimization for customer satisfaction.IT will need business analysts who can play an intermediary role between business and technology. These analysts will need to deeply understand a particular business process and have the skills to develop collaborative relationships with the business lea ders of the various functions involved in the process and to work with them to document their process requirements. Solutions architects will need to deeply understand the services approach to assembling systems and to be able to pull together the appropriate services, data and knowledge to deliver the required functionality.Data analysts will be needed to deeply understand the company’s data and to work with the business to create single sources of key business information and to establish data standards. Finally, the company will need excellent IT architects who will build a technology roadmap for data and services and who will manage the processes. Answer 8:- Aspects of IT Governance important for supporting the transformation It is important that everyone in IT understands where IT is going and what their responsibilities and accountabilities are.It is also important that IT staff insulate the business from the technical compromises that will necessarily result from the a ctual transition, which could take several years. Therefore, the business-facing IT governance must be process-centric, while internal IT governance will necessarily be a mix. Business must also clearly understand its responsibilities and accountabilities and these must be enforced. * Define goals and strategies * Define standards, policies, procedures, around financial, Portfolio, Project, service, etc. * Define metrics * Put Governance mechanism in place * Analyze and Improve existing processes Refine and go to the next level Key IT Governance Strategy and aspects for transformation:- * IT Principles * IT Architecture * IT Infrastructure * Business application needs * IT Investment and prioritization * People (human capital) development * IT Governance policies, processes, mechanisms, tools and metrics- decisions on composition and roles of steering groups, advisory councils, technical and architecture working committees, project teams: key performance indicators(KPI’s), ch argeback alternatives, performance reporting, meaningful audit process and the need to have business owner for each project and investment.

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